Chesapeake Agrees to $30M Royalty Settlement for PA Landowners

Chesapeake Energy is holding out an olive branch to Pennsylvania landowners–the offer of settling a years-old class action lawsuit for $30 million–as reparations for shafting PA landowners out of royalties. But–and it’s a big but–Chesapeake is also snatching the olive branch away unless/until the PA Attorney General’s office resolves its separate lawsuit against Chesapeake for the same thing. No deal with the AG? No final settlement. Chesapeake’s lawyer calls it “global peace”–which we find amusing. The lawyer said “we need global peace,” meaning both lawsuits must be settled. His comment reminds us of the recent song blaring on the radio over the holidays called, “My Grown-Up Christmas List.” Yeah, don’t we all want “global peace.” Chesapeake’s proffered deal will give the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. Frankly, it’s chump change. The big concession by Chesapeake in the proposed deal is that it gives landowners the right to clarify the terms of their leases: “Every Chesapeake lessor will get to pick how their royalties are paid going forward.” Landowners can choose to continue letting Chesapeake market the gas outside of the region (theoretically for a higher price) but requiring the landowner to share in post-production expenses with Chessy as has been the case, OR landowners can rework the lease so there are no post-production expenses deducted. In the second case royalties will be based on the local price of gas in that landowner’s area (typically in the basement). It’s a tough decision. So, landowners got shafted in the past, but the past is the past. Going forward, let’s not get shafted any more. That’s what this proposed deal seems to boil down to. Oh, and throw in a few grand as the cherry on top. The billion dollar question is whether or not the AG’s office will go for it. The AG’s office is signaling it may settle, IF Chesapeake picks a number higher than $30 million as a settlement number…
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Wyoming County Landowners Organize re Low Royalties; Arbitration?

Pennsylvania’s landowners, at least many of them, continue to be angry about getting low–or no–royalty checks. That’s not what they signed up for when leasing their property. A group of 200+ landowners packed a meeting last week in Wyoming County, PA to discuss the situation, and what to do next. The meeting was organized by the Pennsylvania Chapter of the National Association of Royalty Owners (NARO). One distinct possibility raised at the meeting: force Chesapeake (and others) into arbitration. NARO’s approach is to push for legislation, specifically PA House Bill (HB) 557 (see PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time). NARO encouraged attendees to share their royalty stories with lawmakers, telling attendees such stories have an impact. Here’s what happened last week in Wyoming County…Continue reading

Go it Alone? Or Join a Landowner Coalition/Group?

Not every landowner can belong to a group that negotiates a lease to allow Marcellus or Utica Shale drilling. In some areas (like PA, WV and OH), much of the large tracts of land is already leased. However, if you can belong to such a group, MDN believes it is in your best interests to do so. For example, take the experience of landowners in Washington County, PA…
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Wirt County WV Coalition Still in Hunt for a Deal – Who With?

Last summer it seemed like a deal to lease 241,000 acres of land in the Wood, Ritchie, Calhoun, Roane, Jackson and Wirt County area was imminent (see Wirt County Landowner Group Close to Deal for Huge 241K Acres). But then in October Jim Lydon, chairman of the Wirt County Oil and Gas Group said the deal fell through and they were still shopping for a deal (see Wirt County Landowner Deal Falls Through, Still Searching).

According to Lydon the land in their massive coalition is in the “super wet area” of both the Marcellus and Utica Shale–and indeed he’s right. The group is still searching for a deal and no one is talking (that we can tell) on the record–although an article published yesterday in the Parkersburg News and Sentinel does mention, in passing, a few possible companies that may be talking with the group about a new deal…
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Morgan County, OH Looks to Join the Utica Shale Well Club

So far Morgan County, OH (south of Muskingum County, west of Noble County) has been quiet with respect to Utica Shale drilling. We’ve heard nothing. However, in November, Petroleum Development Corporation (PDC) obtained three Utica Shale permits in Center Township, Morgan County. Depending on the results of those three wells, more may be on the way.

In addition to the first three Utica wells to be drilled in Morgan by PDC, another surprise (to MDN): There’s a landowner group in Morgan County we were not aware of–the Morgan County Landowner Group (MCLG)–which incorporated as a non-profit in 2012 and already has 60,000+ acres…
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New Landowner Group Forms in Tyler County, WV

A new West Virginia landowner group has formed in Tyler County with a mission to educate landowners and non-landowners alike, and to benefit landowners that join the group by pooling their property together to negotiate a lease. The new group, called the Middle Island Marcellus and Utica Mineral and Landowners Group, currently has 85 members and 8,000 acres. Landowners in Tyler are fortunate to be located in an area where both the Marcellus and Utica are oil and liquids rich.

More on the group and its objectives (and how you can join):
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CNY Landowners Establish Legal Fund to Sue Towns with Bans

Landowners in the central New York area are tired of having their property rights trampled by a few of their discontented (and misguided) neighbors. When two of three town board members vote to institute a ban or moratorium, it strips away the rights of all landowners in the town and devalues their property, making it all but impossible for them to sign leases for potential future natural gas drilling.

The CNY Landowner’s Coalition (Central New York) has established a fund to help with attorneys fees to defend their property rights against what they consider to be an illegal seizure of their property rights by some towns. First up is to defend their rights against a misguided moratorium in Oxford (Chenango County, NY). Note to Oxford town board members and residents: prepare to spend big bucks to defend a permanent moratorium if you pass one. It’s not a threat—it’s a promise.

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Will NY Gov. Cuomo’s Fracking Plan be Limited to 4 Counties?

Lucky FourIs the Lucky Five counties in New York that will see drilling now the Lucky Four? You may recall a few weeks ago the New York Times, using an unnamed source inside Gov. Andrew Cuomo’s administration (cough *Andy* cough), floated a “trial balloon” plan that will allow high volume hydraulic fracturing, i.e. fracking, for a limited number of permits in five Southern Tier counties for a two-year period: Broome, Chenango, Chemung, Steuben and Tioga (see this MDN story).

One of New York’s largest landowner coalition groups, CNY Landowner’s Coalition, represents Chenango County—one of the Lucky Five. They have reliable “inside” sources that tell them Chenango County may not be included in the limited, two-year experiment. And they are marshaling their members to make noise about it.

Below is an email received by MDN on July 3 from the CNY Landowner’s Coalition outlining the rumor they’ve heard, and what they want members to do about it.

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Landowner Coalition Statement on Rumored Cuomo Fracking Plan

The Joint Landowners Coalition of New York (JLCNY), a coalition of coalitions representing over 70,000 landowners, issued a statement about the unannounced/announced plan by Gov. Andrew Cuomo to allow hydraulic fracturing in five counties in New York—in a limited fashion—for the next two years. Their statement in full is embedded below.

The short version is: We’re trying to get clarification and determine what’s what, and we’re not going to criticize the governor until we hear more, and certainly not based on a newspaper article.

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Large Combined Upstate NY Landowner Meeting June 21

MDN received the following announcement about a combined landowner coalition meeting happening tomorrow night (Thursday night) in Otego, NY. Two coalitions will meet together: The Central New York Landowner Coalition and the Unatego Land Coalition. MDN knows from previous meetings that we’ve attended that the CNY coalition is quite large, perhaps the single largest New York coalition with thousands of active members. The meeting will feature a screening of the new Truthland movie along with a presentation by former NY DEC Commissioner Mike Zagata.

Combined Coalition Meeting (With the Unatego Land Coalition)
June 21, 2012 – 7PM – Unatego Jr/Sr High School – Otego, NY
Full Length "Truthland" Movie starts at 6:40PM

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NY Coalition Releases Declaration of Landowner Rights

Yesterday, the Joint Landowners Coalition of New York (JLCNY) launched a new public relations offensive in Albany, NY aimed at catching the attention of lawmakers. President of the JLCNY, Dan Fitzsimmons, along with other leaders of the coalition and state senators Tom Libous (R-Binghamton) and Tom O’Mara (R-Big Flats), delivered a “Declaration of Landowner Rights” to lawmakers. The Declaration (a copy is embedded below) contains six points that the JLCNY says are constitutionally protected under federal and state law, and they are reasserting and claiming those rights.

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eCORP & Tioga County Landowners Become Partners in Lease Deal

tie the knoteCORP International and the Tioga County (NY) Landowners Group, also known as Southern Tier Energy Partners (STEP), released details of their new deal to lease 135,000 acres in Tioga County, NY with an eye to using LPG waterless fracking (press release below). It is an interesting deal—not at all typical of the usual leases between drillers and landowners. Perhaps it’s the way of the future in a low commodity gas price environment?

Here’s the low down: eCORP and STEP crafted a deal that makes landowners majority owners of shell companies that control the land. That is, the landowners will become “drillers,” or rather silent partners with the main driller, eCORP—but partners nonetheless, and they collectively will be majority partners, with eCORP a minority partner. eCORP and STEP are tying the knot and getting married—for this deal.

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Alternative Fracking Method May Soon Debut – in New York!

fox in hen houseThe anti-drilling crowd is about to be tested as to their true reasons for opposing shale gas drilling, and it will happen in leftist paradise—New York State.

What if you removed 99 percent of the stated objections to fracking? Took away the millions of gallons of water needed to frack a single well? Took away almost all of the chemicals used? Took away fracking wastewater that either needs to be recycled or treated or injected into a deep well? Took away almost all of the heavy truck traffic and noise and other industrialization concerns? In short—what if you took away almost every reason to oppose gas drilling?

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Antero Pays Record Rates in Eastern Ohio Utica Lease Deal

prices going higherThe Utica Landowner Group of eastern Ohio has just cut a deal with Antero Resources for what is believed to be the highest amount paid yet for a lease deal: $5,900 per acre for a signing bonus, and 21 percent royalties. The deal covers land in Belmont, Monroe and Noble counties in Ohio.

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